Employers regularly misunderstand their obligations under the Family and Medical Leave Act (FMLA)—especially when they operate across multiple locations, use remote employees, or experience high employee turnover. The most common mistake is failing to distinguish between whether the employer is covered by the FMLA and whether a particular employee is eligible for FMLA leave.

These are two separate legal questions governed by different rules. Conflating them can lead to incorrect handbook language, denied leave requests, and unnecessary legal exposure.

This article explains how employers should analyze each issue correctly and highlights common miscounting errors that frequently put employers on the wrong side of the law.

Step One: Is the Employer Covered by the FMLA?

The Coverage Test Is a Headcount Test — Not a Location Test

An employer is covered by the FMLA if it is a private-sector employer that employs 50 or more employees for at least 20 workweeks in the current or preceding calendar year.

Key points employers often miss:

• The 50-employee threshold is company-wide, not location-specific

• Employees do not need to work in the same city or state

• Remote and telework employees count toward coverage

• Part-time employees count

• Seasonal and temporary employees count for any week in which they are employed

If an organization employs 50 or more people for 20 workweeks—even if those employees never physically report to a central office—it is a covered employer under the FMLA.

High Turnover Does Not Eliminate Coverage

Employers with high turnover often assume they are not covered because they “never have 50 employees at one time.” That assumption is frequently wrong.

The law does not require the same 50 employees to be employed for 20 weeks. Instead:

• Different employees can be counted from week to week

• Any week in which 50 or more employees appear on payroll counts

• The 20 weeks do not need to be consecutive

Employers in retail, hospitality, healthcare, staffing, and service industries are particularly prone to miscounting due to frequent hires and separations.

Step Two: Are Employees Eligible for FMLA Leave?

Even if the employer is covered, not every employee is eligible for FMLA leave. Employee eligibility is determined individually and includes three separate requirements.

1. Length of Service

The employee must have been employed for at least 12 months (not necessarily consecutive).

2. Hours Worked

The employee must have worked at least 1,250 hours during the 12 months immediately preceding the start of leave.

3. The 75-Mile Rule

The employee must work at, or report to, a worksite where the employer employs at least 50 employees within a 75-mile radius.

This is where most confusion arises.

How the 75-Mile Rule Actually Works

Physical Location Is Not Always the Worksite

For traditional on-site employees, the worksite is usually obvious. For remote employees, however, federal regulations specify that the worksite is:

• The location to which the employee reports, or

• The location from which the employee's work is assigned or supervised

An employee's home location is irrelevant for FMLA eligibility purposes.

Why Employers Get This Wrong

Employers frequently misapply the 75-mile rule by:

• Counting employees at the employee's home location

• Ignoring remote employees altogether

• Treating eligibility as a company-wide determination

• Assuming that being a covered employer means all employees are eligible

None of these approaches align with the regulations.

The Handbook Trap: Coverage vs. Eligibility Language

Many employer handbooks incorrectly state that the organization is “not subject to FMLA” when the real issue is that some employees may not be eligible.

This distinction matters.

An employer can be fully covered by the FMLA while having:

• Multiple locations with fewer than 50 employees within 75 miles, or

• Remote employees reporting to dispersed management structures

A blanket denial of coverage in a handbook can:

• Misstate the law

• Support interference or estoppel claims

• Undermine defenses even when no employee qualifies for leave

Best Practices for Employers

To reduce risk and maintain compliance, employers should:

• Conduct an annual coverage audit based on payroll records

• Count all employees employed during each workweek

• Track rolling headcount, not just snapshot totals

• Identify reporting locations for remote employees

• Use handbook language that distinguishes coverage from eligibility

Accurate classification and clear communication are often the difference between lawful leave administration and costly disputes.

Final Takeaway

FMLA compliance begins with understanding that coverage and eligibility are not the same thing.

• Coverage depends on total employee headcount over time

• Eligibility depends on individual employee circumstances

• High turnover does not prevent coverage

• Remote work does not eliminate eligibility

Employers who miscount employees—or rely on outdated assumptions—often discover their error only after a leave request or legal claim arises. Getting the analysis right upfront is far less expensive than defending it later.